The Judicial Court of Nacala-Porto authorised the sale of ETG’s seized assets to avoid the deterioration of the agricultural commodities and the consequent irreversible loss of asset guarantees.
THE Royal Group said yesterday it had been granted the right to sell seized ETG assets which a court ordered it to seize as an economic bond for the $60 million (R1 billion) losses and damages caused by ETG to Royal Group.
ETG’s international shareholders include Japan’s Mitsui, South Africa’s Public Investment Corporation, and Saudi Arabia’s Sabic chemicals company.
This order was made pending the outcome of the main case. Ahead of the sale of the seized assets, Royal had been ordered to provide an immediate guarantee of $39m to the court, which it had done.
This amount included an approximate $32m for the value at cost of security, plus a 20% margin for potential changes in market pricing.
The Judicial Court of Nacala-Porto authorised the sale of ETG’s seized assets to avoid the deterioration of the agricultural commodities and the consequent irreversible loss of asset guarantees.
Hassnein Taki, the CEO of The Royal Group, said: “This is a fair, albeit onerous decision by the courts. While it protects the rights of both Royal and ETG, it is not easy to secure such a large guarantee, given that Royal has already suffered severe financial losses due to the actions of ETG. This decision is of course an interim measure; what both companies need is a decision in the main case as soon as possible.”
The dispute between ETG and Royal Group began in 2022 when, according to the statement of claim that Royal submitted to Mozambican courts, ETG sent an anonymous tipoff to the Indian authorities, saying that The Royal Group was shipping genetically modified organism (GMOs) soya beans to India.
The shipment was in fact non-GMO, and Royal Group, during a subsequent court case against ETG in Mozambique, established that ETG was the anonymous party that tipped off the Indian authorities. This claim is still pending before Mozambican courts.
The Royal Group is Mozambique’s largest exporter of agricultural crops.
BUSINESS REPORT